Monday, August 21, 2006

Speaking of Liquid Bans--India says NO to Coke and Pepsi

It was not a good day for Coke and Pepsi. A court in India denied their request to lift a ban on selling their beverage products. The products were banned last month by the communist-ruled southern state of Kerala because high levels of pesticides have been found in the drinks.

To defend itself Pepsi launched a two -prong media campaign. The blog, Satish and his thoughts is not that impressed.

Pepsi has fired recently two shots in air for self-defense. The first one was an advertisement claiming that the tea Indians drink has 14.2 ppm residue of pesticide which is 28000 times higher than such residue in Pepsi. The Tea Board of India has described the claim as "totally false". It is a classic case of the pot calling the kettle black. Tea is as old as Indian civilization and is the most favourite drink among Indians. It is processed plant leaf unlike Pepsi whose ingredients are so zealously guarded secret that the formula has been
stored in some unknown vault. Assuming that tea contains dangerous levels of pesticide, it does not absolve Pepsi of the charges already made against it. Moreover, tea is boiled before use whereas colas are taken directly thus reducing the harmful effects.

Satish also reports that Pepsi Co Chairman Rajeev Bakshi is supporting a ban on selling "fun" drinks in primary schools. Bakshi's is reported to have said - "Soft drinks should not be consumed at that age. If schools ban them, we will not contest them".

Meanwhile, Frank Lavin, under secretary for international trade has said the ban is a setback for the Indian Economy. Lavin is quoted as saying the ban could hinder American investment dollars in the region, adding,

" it would be unfortunate if the loudest voices were those who did not want to treat foreign companies fairly.

Meanwhile The Insider which reports on conspiracy theories and the New World Order, headlined the controversy this way:

Coke and Pepsi banned in India for putting poison into drinks

The addictive sugary American drink, "Coca Cola", has been banned in many regions accross India, because the product is being contaminated with poisonous chemicals which the company claims are "safe".

Tests show that the amount of harmful chemicals in the mixture is actually being gradually increased. The mass media is not reporting which chemicals are involved or their effects in humans, they are simply described simply as "pesticides", and the long history of contamination now on record is allegedly not deliberate.

The ban has now spread to the UK according to UPI:

Britain's University of Sussex has banned all Coca-Cola products from its student union to protest the company's alleged business practices.

Other British campuses are expected to follow suit amid calls for a nationwide student boycott against the soft drink giant, the Independent reported Saturday.

U.K. Students Against Coca-Cola has been pressuring the purchasing consortium that provides food and drink to British campuses to cancel its four multimillion-dollar contracts with Coke, the newspaper said.

While Satish says he now longer drinks "fun" drinks because of the health risk, he comes down hard on the government ban.

The Kerala government’s jumping into the fray and banning production as well as sales without any proper investigation is just like severing the head for curing headache. The announcement through ads by Pepsi’s brand ambassador – a popular film star that he would go to USA to drink Pepsi if it is banned in India is equally preposterous. Even the news report in Washington Post that Americans drink over 100 times more colas than Indians is not going to help matters. That Indians are not very much dependent on the colas has been proved by the most unexpected gain made by tea after the ban was imposed.

Image Credit:Yahoo! News

Posted on Monday, August 21, 2006 in Business Culture/Trends, Corporate Social Responsibility, Food and Drink, Global Business | Permalink

Technorati Tags: appeal, ban, Coke, courts, India, Pepsi, pesticides

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Excellent coverage of this issue. This interesting article suggests that the issue here is more than just about soda, but rather more of an American influence and American commercialism in India. As such, I'd say the PR stakes are indeed alot greater than just selling soda...

Posted by: Paul Cashell | Tuesday, August 29, 2006 at 04:41 PM

This was indeed a devastating development for the companies involved. We all know that regulations and standards in place in the West are not as stringent in other parts of the world. Still, I'm not sure a complete ban was the best option.

Posted by: panasianbiz | Wednesday, September 13, 2006 at 11:55 AM

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